MARRIOTT: We can’t all work for the government

William D. Marriott is a retired economist who specialized in public policy analysis of the oil and gas industryCanada is indeed broken. Now is the time to eliminate government waste and reduce government size.There is an old saying: ‘If a third of the people work for the government and a third depend on the government then it is really hard for the other third to elect a government’. This is where we are now in Canada.Economists probably spend way too much time debating the optimal size of government and thus the optimal level of taxation. Too low and the basic economic institutions, judiciary and personal security cannot be maintained. Too high and government drags down the ability of the economy to produce goods and services and jobs.Too much tax takes away any incentive for people to advance themselves to better jobs or to take risks as entrepreneurs. And too much tax and regulation can kill mega-projects before they can even go to capital markets. The ‘optimal’ level of taxation is about 20-25% but in Canada the rate has been rising steadily and is now around 50%. This has left us with lower productivity and also lower employment. We have dug ourselves a hole that will be hard to get out of. The worst thing is that Canadian taxation is a “death by a thousand cuts.” Remember the capital gains tax that recently died with prorogation but the CRA is going to enforce anyway. Who is in charge here?Government is also notoriously inefficient with estimates of a 30-40% cost premium over what private enterprise would charge to do the same work. Want to know how to take a $5 billion dollar pipeline and get it to cost $35 billion? Just give it to a government bureaucracy. Want to know how to reduce taxes by 20%? Just outsource the non-security functions of government to the private sector. But no, in Canada we are increasing the size the bureaucracy and not just at the federal level.The provinces are no better. Alberta economist Todd Hirsch in a 2021 paper analysing employment trends in Alberta concluded, “A few observations stand out immediately. First, an undeniable pattern emerges over the last ten years: jobs in healthcare, education and public administration — largely related to government spending — are becoming more dominant. They grew from 21 to 26 per cent of all jobs over the last ten years. Second, jobs in sectors that traditionally define the images of Alberta — energy, tourism and farming — are becoming less dominant. They fell from 16 to 13 per cent of total jobs. This defies the misconception that everyone in Alberta is employed in oil and gas or farming.”Danielle Smith’s current quest to reform health care to expand private delivery while maintaining public funding is an attempt to reverse this trend. But of course, the bureaucracy is fighting back. AHS has over 100,000 employees and takes up about half of the provincial government budget. That’s a lot of people and a lot of money who are dedicated to maintaining the status quo.All of the recent firings at the AHS are just senior level bureaucrats defiantly refusing to do what the government is directing them to do. Imagine Smith as Chairman of the Board (Cabinet) and AHS CEO as company president. Could you image a company CEO defying direction from the Board? They would be fired immediately.The question is: who works for whom? Smith faces the unenviable position of being both responsible for health care and being powerless to do anything about it. When she exerts her authority she is told by the MSM (and Naheed Nenshi) that AHS is the boss. The current AHS/law suit imbroglio is likely to not end well for AHS. At this point the “scandal” is based on unproved allegations. Even the recent resignation by Peter Guthrie just shows he’s forgotten that politics is a team sport. And he thinks he is bigger and smarter than Smith and her Cabinet and the UCP caucus. (He is not.) Perhaps he believes he can one day be premier. Can you imagine anywhere in the private sector where you can quit your job, publicly malign your company, abandon your obligations (constituency) but still get paid for doing ... what again?And the City of Calgary is no better. Who runs the city, the politicians or the administration? This seems to be changing — but really slowly. In a recent council debate to look for tax savings some renegade councillors suggested that one of the two top bureaucrats be “fired” to quote a popular but controversial politician. And what about some of these city jobs? Look on the city website for the org chart for “Climate and Environment”. You will find five levels in the hierarchy and sixteen employees. Inquiring minds might want to know “what did you do last week?” Presumably they are looking at ways to spend $87B of your tax money to get to Net Zero by 2050. That’s right, this program is still underway and these folks are still spending your money as we speak. And why is the City in the business of providing subsidized housing to the poor when they can’t even fill potholes in our roads or guarantee safe drinking water?How do we get out of this mess? The big bad orange man south of the border has provided a template. Have a highly successful private entrepreneur head up an independent agency dedicated to rooting out government largesse and inefficiency. Give that agency big powers and turn them loose on the bureaucrats. In four years you can radically reform the way government does business. And perhaps get rid of our private enterprise deficit.Any candidates for Canada? I would suggest Kevin O’Leary a proud Canadian and one-time aspiring leader of the Conservatives.Pierre, it’s time to bring home Canadian private initiative.William D. Marriott is a retired economist who specialized in public policy analysis of the oil and gas industry.

MARRIOTT: We can’t all work for the government

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